Western Railroad Discussion > STB Accepts CP-KCS Merger Application

http://0.gravatar.com/avatar/3e5706924b99c2e99ef1f023069802e9?s=50&d=identicon&r=GSTB Accepts CP-KCS Merger Application

 The merger application filed by Canadian Pacific and Kansas City Southern has been accepted by the U.S. Surface Transportation Board.
Regulators are expected to take up to a year to review the merger bid, which the carriers formally sought in October.

The STB thus turned aside objections by Union Pacific and Canadian National that the CP-KCS merger application was incomplete (UP) or filed too soon (CN)

 “The Board finds that the Application is complete as it contains all information required by the Board’s regulations. Accordingly, the Application is accepted,” the board wrote in accepting the CP-KCS application.

Next question is how will CN respond as I don't see them continuing to interchange much traffic at Jackson MS with CPKC destined for points in TX/MX. I read a few weeks back that they see CN switching to UP at Baton Rouge and where possible have UP interchange that traffic to FXE in MX.

To a lesser degree UP and even BNSF could also switch to FXE where possible in order to counter any CSX/NS originated traffic CPKC might attempt to divert away. Ultimately, FXE might be the big winner out of the CPKC merger.

Not sure why the STB is in a big enough rush to deny UP's request for statutory time but I think it was a
mistake and sooner or later the protests will become louder, loud enough for the politicos to hear.

Out 

callum_out Wrote:
-------------------------------------------------------
> Not sure why the STB is in a big enough rush to
> deny UP's request for statutory time but I think
> it was a
> mistake and sooner or later the protests will
> become louder, loud enough for the politicos to
> hear.
>
> Out 

The merger appears to be rolling along on greased rails.
ALLEN

What is the oldest locomotive in the Kansas City Southern fleet?

callum_out Wrote:
-------------------------------------------------------
> Not sure why the STB is in a big enough rush to deny UP's request for statutory time
> but I think it was a mistake and sooner or later the protests will become louder, loud
> enough for the politicos to hear.

Reading the STB ruling may help. The STB explained why they felt the application was complete and could be moved forward and noted that any differences in opinion on what data to use and how to interpret the data is better off done as part of the process. There is no requirement that UP or CN be entirely satisfied or happy with CP/KCS' application. The application meets the legal requirements to move forward and it will do so,

UP should take note that this merger is being adjudicated under 2001 rules. Expecting CP/KCS to comply with rules not in effect in 2001 is not appropriate. CN should take note that they lost the fight to merge with KCS. Playing obstructionist is not appropriate.

Open for question is what CP will or won’t do with the KCS St Louis to Kansas City route. It’s a low-density line that doesn’t connect with any other CP lines on the east end. Court documents for the merger state that current traffic averages 1.3 trains a day from Roodhouse to East St Louis and about 2.3 on the Mexico (MO) sub and will stay at those levels with no infrastructure improvements identified on either sub.
               This is opposed to the Laredo sub in Missouri which will go from 3 trains/day to 17 over three years. They’re planning on adding sidings and extending others to 10,000 feet as well as converting it completely to CTC.  
 



Edited 1 time(s). Last edit at 11/26/21 06:36 by RJM29.

RJM29 Wrote:
-------------------------------------------------------
> Open for question is what CP will or won’t do
> with the KCS St Louis to Kansas City route. It’s
> a low-density line that doesn’t connect with any
> other CP lines on the east end. Court documents
> for the merger state that current traffic averages
> 1.3 trains a day from Roodhouse to East St Louis
> and about 2.3 on the Mexico (MO) sub and will stay
> at those levels with no infrastructure
> improvements identified on either sub.
>                This is opposed to
> the Laredo sub in Missouri which will go from 3
> trains/day to 17 over three years. They’re
> planning on adding sidings and extending others to
> 10,000 feet as well as converting it completely to
> CTC.  
>  

If CPKC wants to appease UP, the line with the most projected loss of traffic and the one with the most intertwined operations, sell the line to UP.  It would provide a shorter route for Global 4 intermodal traffic than via St. Louis, save a few hours and fuel.  Build an eastbound connection off the UP River Sub at Marshall, Mo. and run directional between KC and Marshall.  It would take some decent investment to get the line up to say 60mph, but it provides a great outlet for traffic growth.  Amtrak would like it; gets the trains off the Springfield-St. Louis segment.

To satisfy CSX and their daily(?) intermodal they hand off to KCS at St Louis, UP should provide CSX with trackage rights to KC on their current corridor for intermodal traffic only.  Might even permit CSX to develope a new market for them between KC and the east.  CPKC would net more from the sale than they would from continued operations for the next ?? years!  And the rail infrastucture gets an upgrade!

Mexrail



Edited 1 time(s). Last edit at 11/26/21 07:34 by mexrail.

Does KCS still have any rolling stock in the NdeM livery?

UP has zero interest in the Gateway Western. For one there isn't as much of mileage savings as you think as it's only around 85 miles compared to running via St. Louis. This doesn't even include the fact the UP across MO is two main or directional track plus around 60% of the ex GM&O between Springfield and St. Louis is 2 main track. Basically UP can make 15-kft monster stacks running between KC and Springfield via St. Louis with minimal issue of stops/meets.
In contrast...the Gateway Western is currently a 40 mph, single track railroad with minimal to no sidings to handle 15+kft trains, meaning UP would have to toss in a ton of money with upgrades just to gain at most a couple hours for lower priority trains. Even with upgrades, UP already knows from running test trains on the parallel NS ex-Wabash line a couple years ago that they'll have to leave Z trains on the BNSF transcon between KC and G4 to remain competitive. Essentially, the Gateway Western doesn't help UP remove Z trains from the BNSF or improve transit times much for lower priority traffic running through St. Louis to justify spending money on it. Now if we were talking about somebody else spending the money on the Gateway and UP stumbles into ownership, then maybe it becomes possible. UP is content running Z trains via Ft Madison and everything else intermodal through St. Louis.

If we are watching for anybody else it should be CSX as they are much more likely to throw cash at the Gateway Western.

mexrail Wrote:
-------------------------------------------------------

>
> If CPKC wants to appease UP, the line with the
> most projected loss of traffic and the one with
> the most intertwined operations, sell the line to
> UP.  It would provide a shorter route for Global
> 4 intermodal traffic than via St. Louis, save a
> few hours and fuel.  Build an eastbound
> connection off the UP River Sub at Marshall, Mo.
> and run directional between KC and Marshall.  It
> would take some decent investment to get the line
> up to say 60mph, but it provides a great outlet
> for traffic growth.  Amtrak would like it; gets
> the trains off the Springfield-St. Louis segment.
>
> To satisfy CSX and their daily(?) intermodal they
> hand off to KCS at St Louis, UP should provide CSX
> with trackage rights to KC on their current
> corridor for intermodal traffic only.  Might even
> permit CSX to develope a new market for them
> between KC and the east.  CPKC would net more
> from the sale than they would from continued
> operations for the next ?? years!  And the rail
> infrastucture gets an upgrade!
>
> Mexrail



Edited 1 time(s). Last edit at 11/26/21 22:14 by AaronJ.

RJM29 Wrote:
-------------------------------------------------------
>                This is opposed to
> the Laredo sub in Missouri which will go from 3
> trains/day to 17 over three years. They’re
> planning on adding sidings and extending others to
> 10,000 feet as well as converting it completely to
> CTC.  

Don't hold your breath waiting for those 17 trains/day to show up.  That count is wildly optimistic.  I'd like to know where they think the traffic for 17 trains is going to come from.  Seems to me most of the traffic that will be on that line is already on it.  Maybe they've got a plan for some new intermodal service route and new city pairs for manifest traffic, but 17 trains worth?

They do need the upgraded sidings even now though, so I have no doubts that will happen.  Will be sorry to see our beloved RI era searchlights at Cotter, IA go away...

Andy


 

Sp1110 Wrote:
-------------------------------------------------------
> Does KCS still have any rolling stock in the NdeM
> livery?

Yup.

Posted from Android

Re: CSXT intermodal over the former Gateway Western…. CSXT PSR’ed their intermodal traffic across the former GWWR such that there isn’t a dedicated full train to hand-off to KCS. With that kind of effort and dedication I don’t foresee them “growing” the business to Kansas City.